Sony’s leadership in gaming services will help it control next-generation console market, says GlobalData

Following the first reveal of Sony’s next-generation PlayStation 5 console;

Rupantar Guha, Senior Analyst of Thematic Research at GlobalData, a leading data and analytics company, shares his views:

“The next-generation gaming consoles will increasingly pivot around added-value services. With limited differentiation in hardware, both Sony and Microsoft will need to focus on platform-exclusive titles, subscriptions and cloud gaming to sway customers.

“Sony’s main strength is its extensive games portfolio, which features a mix of first- and third-party titles. Its main rival, Microsoft, has some exclusive titles, including Halo, but the PlayStation 5 will maintain Sony’s advantage thanks to titles such as Spider-Man: Miles Morales, Gran Turismo 7, and Ratchet & Clank: Rift Apart.

“Sony promises backward compatibility of PS4 and older consoles games on the PS5. With no equivalent to Microsoft’s Smart Delivery (that offers the latest versions of older games on new devices), it is reportedly integrating its PS Now cloud gaming service with the PS5. This should help Sony overcome technical and cost-related challenges related to the compatibility of old PS games, but the company will have to address the latency issues facing PS Now. Failure to do so will cause it to lose market share to Microsoft, which is planning to integrate the xCloud cloud gaming service with its Xbox Series X consoles.

“Another key area of focus for both Sony and Microsoft will be subscriptions, as the industry transitions to an as-a-service model. Microsoft plans to bring the Xbox Game Pass service (which currently boasts ten million users) to the Xbox Series X, but Sony also has an advantage here. Its PlayStation Plus service has 42 million users and could be integrated with the PS5, especially its digital variant, although the company has yet to officially announce such a move.”

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